2. C HAPTER 6 D ESIGN AND S IZE OF S ALES T ERRITORIES

4. W HAT IS A S ALES T ERRITORY? A sales territory is composed of a group of customers or a geographic area assigned to a salesperson.

5. W HO IS R ESPONSIBLE FOR T ERRITORIAL D EVELOPMENT? Development of sales territories is usually the responsibility of the sales manager overseeing the larger sales units within the organization.

8. F ACTORS TO C ONSIDER WHEN D ESIGNING S ALES T ERRITORIES Sales force objectives may be based on factors such as contribution to profits, return on assets, sales/cost ratios, market share, or customer satisfaction.

9. FIGURE 6.1 FACTORS TO CONSIDER WHEN DESIGNING TERRITORIES

11. A NALYZE S ALESPEOPLE’S W ORKLOADS Workload is the quantity of work expected from sales personnel. Three of the main influences on workload involve the nature of the job, intensity of market coverage, and type of products sold.

13. D ETERMINE B ASIC T ERRITORIES The breakdown approach uses factors such as sales, population, or number of customers. Forecasted Sales Average Sales per Salesperson Sales Force Size =

14. TABLE 6.1 SIX STEPS TO CONSIDER WHEN DETERMINING A FIRM’S BASIC TERRITORIES 1. Forecast sales and determine sales potentials. 4. Tentatively establish territories. 2. Determine the sales volume needed for each territory. 5. Determine the number of accounts for each territory. 3. Determine the number of territories. 6. Finalize the territories, and draw the boundary lines.

16. A SSIGN TO T ERRITORIES Some salespeople can handle large territories and the travel associated with them; some can’t. Some territories require experienced salespeople; some are best for new people. Some people want to live in metropolitan areas; others prefer territories with smaller cities.

17. C USTOMER C ONTACT P LAN The customer contact plan involves scheduling sales calls and routing a salesperson’s movement around the territory.

19. FIGURE 6.2 THREE BASIC ROUTING PATTERNS

24. E VALUATION AND R EVISION OF S ALES T ERRITORIES Territorial control is the establishment of standards of performance for the individual territory in the form of qualitative and quantitative quotas or goals.

25. T HE S ALES T ERRITORY IS A B USINESS T HE R IGHT S ALESPERSON P AYS O FF

27. Sales leakage refers to the lost sales due to both the vacancy and the time required for the new salesperson to produce at average.

28. T HE B OTTOM L INE According to salespeople, managing time and territory is the most important factor to be considered when carrying out their selling duties. Developing sales territories has advantages as well as certain disadvantages. Sales force objectives are usually converted into individual sales territorial goals. The three main influences affecting the sales personnel’s workload are nature of the job, intensity of market coverage, and products sold.

29. Before designing sales territories, managers must consider six factors. The customer contact plan includes scheduling sales calls and routing salesperson’s movement around the territory. Territorial control allows actual performance to be compared with standards of performance for evaluation purposes. T HE B OTTOM L INE continued